(Bloomberg) -- The U.S. is poised to impose sanctions on Turkey as soon as Monday in response to the nation’s advance into Syria, according to people familiar with the matter, days after President Donald Trump cleared the way for Turkey to launch its offensive by pulling American forces from the area.
The initial round of penalties would most likely be aimed at a wide range of individuals and was prepared for Trump’s approval, according to one of the people. The departments of State, Defense and Treasury worked over the weekend to draft the terms, the people said.
The Trump administration is leaving open the option of penalties aimed at military transactions, arms exports and energy shipments to the Turkish military, two people said. All of the people spoke on condition of anonymity due to the sensitivity of the matter.
The move is an effort to contain the damage from Trump’s decision to stand aside if Turkey entered northern Syria, essentially giving Turkish President Recep Tayyip Erdogan a green light to carry out the operation. Erdogan says the offensive is necessary to push back Kurdish militants and resettle refugees, but the rapid advance into Syria has drawn international condemnation and accusations of war crimes.
Trump’s decision exposed American-allied Kurdish militias to attack, risking a resurgence of the Islamic State and a slaughter of the Kurds. Kurdish forces that previously fought alongside the U.S. have warned they may no longer be able to secure camps and prisons holding Islamic State jihadists, including Europeans whose home countries don’t want them back.
Lira Falls
The Turkish lira lost as much as 0.94% to session low 5.9384 per dollar shortly after news of U.S. sanctions. The currency later pared its drop, declining 0.82% to 5.9317 per dollar at 12:38 p.m. New York time. Month-to-date, the lira has sunk more than 4.7%, the worst performer among 24 emerging-market currencies tracked by Bloomberg.
Treasury Secretary Steven Mnuchin said Friday that the administration was also weighing sanctions against Turkish financial institutions, a move that would hit its economy hard because they are heavily reliant on the dollar. Yet since Mnuchin’s remarks, critics have warned that any new measures from the U.S. would have limited effect because telegraphing sanctions would encourage asset flight.
”The time lag allows adversaries and targets to set the conditions on the ground,” said Eric Lorber, a former sanctions adviser in Mnuchin’s Treasury department. “This means that sanctions on Turkey face significant obstacles to success, namely that Turkey may be able establish advantageous facts on the ground before sanctions have a chance to seriously bite.”
Treasury and the White House declined to comment.
Trump has defended his decision to withdraw troops, tweeting on Monday that the U.S. was “not going into another war with people who have been fighting with each other for 200 years.” He also suggested the Kurds may be releasing prisoners “to get us involved.”
But Trump’s decision was met with fierce criticism from allies in Washington, including Senator Lindsey Graham. The South Carolina Republican has been working on legislation to sanction Turkey for the invasion and said Sunday that he spoke with Trump about it over the weekend.
House Speaker Nancy Pelosi is among lawmakers concerned that Trump will not impose strong enough sanctions.
“As we find ourselves in a situation where the President gave a green light to the Turks to bomb and effectively unleashed ISIS, we must have a stronger sanctions package than what the White House is suggesting,” Pelosi tweeted Monday.
Execution of Kurds
Asked on CBS’s “Face the Nation” about videos circulating that appear to show the execution of some Kurds, Secretary of Defense Mark Esper said if true, they “would be war crimes” -- raising questions about whether talk of imposing economic sanctions may be coming too late.
Esper said the U.S. learned in the past 24 hours that Turkey is likely to attack further south and to the west in Syria, and that Kurdish forces are looking to cut a deal with Syria and Russia to counterattack against the Turks in the north.
The defense secretary said he spoke with Trump on Saturday night, and that after discussions with the national security team, the president directed the start of the withdrawal of forces from northern Syria but not the entire country. Trump and Esper are scheduled to meet again on Tuesday.
